Business Project Management

THE PROJECT: RESEARCH ON THE IMPACT OF

CONGESTION CHARGING ON LOCAL BUSINESSES

 

 

Mind Map

 

 

Explanation of the Mind Map

The figure above shows the interaction of a business entity with its internal and external environment.  Since a strategy can be triggered by competition, industry standards, government policy and employee motivation, these four aspects of a business is crucial to its success.  In effect, using analogy, this constitutes the basic framework of a business decision-making analysis.  Specially, this framework will identify the advantages and disadvantages of congestion charging for business within the area and also nearby firms.  For customers, a business may be adversely affected when low-income consumers may be distracted with the charge at peak times in which it is the regular schedule for shopping or dining for businesses within the charging area.  It will lead to loose in sales and therefore policymakers must be able to explain to this to the businesses within the charging area. 

 

The same analogy is applicable to competitors between businesses that are competing in the same market.  The location advantages (e.g. the presence or absence of congestion charging within the area) can increase the profitability of those outside it or in nearby areas and lower the profits of those within it.  In effect, business industry is not severely affected rather only those in minority.  For business operations, logistics companies or even those with business establishments that delivers the products may produce additional cost due to congestion charging.  Lastly, increase in taxes and economic recession may deepen the problems of business within the area if congestion charging is implemented.  The mind map shows that business are affected and can affect the environment in which it operates and thus can also affected by advantages and disadvantages of congestion charging.      

 

 

Work Breakdown Structure (WBS)

 

1.0.0.0. Research Project: Impact of Congestion Charging on Local Businesses

 

1.1.0.0. Customer Survey

1.1.1.0. Data Collection

1.1.1.1. Prepare questionnaires

1.1.1.2. Conduct interviews and distribute questionnaires

1.1.1.3. Record and organize data

1.1.2.0. Data Analysis

1.1.2.1. Apply statistical treatment to quantitative and qualitative data

1.1.2.2. Search applicable theories

1.1.2.3. Report findings

                           1.1.3.0. Data Presentation

1.1.3.1. Justify reliability and consistency with past  

            researches

1.1.3.2. Definition of implications

1.1.3.3. Summarize, secure copy and file

                                        

 

            1.2.0.0. Business Operations Survey

  1.2.1.0. Data Collection

                1.2.1.1. Prepare questionnaires

                1.2.1.2. Conduct interviews and distribute questionnaires

    1.2.1.3. Record and organize data

1.1.2.0. Data Analysis

1.1.2.1. Apply statistical treatment to quantitative and qualitative data

1.1.2.2. Search applicable theories

1.1.2.3. Report findings

1.1.3.0. Data Presentation

 1.1.3.1. Justify reliability and consistency with past  

            researches

 1.1.3.2. Definition of implications

 1.1.3.3. Summarize, secure copy and file

 

1.3.0.0. Business Sector Evaluation

1.3.2.0. Research on secondary data

               1.3.2.1. Evaluate past researches

               1.3.3.2. Study established theories and principles within 

  the British environment

1.3.3.3. Study established theories and principles within 

  a global perspective

1.3.3.0. Conduct forums with experts and academicians

1.3.4.0. Integrate to other Aspects

1.3.4.1. Formulate over-all business impact evaluation

        mentioning the effects on key industries

                                          1.3.4.2. Re-check findings on consistency and reliability

                                          1.3.4.3. Make reports and summaries

 

1.4.0.0. General Environment Scanning

               1.4.1.0. Define current PESTEL situation in the area

               1.4.2.0. Conduct research if PESTEL knowledge is insufficient

   1.4.3.0. Conduct short interviews with experts, politicians, lawyers

                                     and other pertinent people about the future of PESTEL

                           1.4.4.0. Collate data

                           1.4.5.0. Analyze data

                           1.4.6.0. Search relevant theories and principles

                           1.4.7.0. Report findings, summarize, secure copy and file

                                     

                               

Product Breakdown Structure (PBS)

 

1.0.0. Research Project: Impact of Congestion Charging on Local Businesses

1.1.0. Customer Aspect

1.1.1. Effects on Business Patronage and Buying Behavior

1.1.2. Effects on Charged Zone Outlet Visitations

1.1.3. Effects on Purchasing Power

            1.2.0. Operations Aspect

                        1.2.1. Effects on Functional Areas like Distribution and Marketing

                        1.2.2. Effects on Cost and Differentiation Strategies

                        1.2.3. Effects on Short- and Long-Term Profitability/ Strategy

                        1.2.4. Effects on Business Risks

            1.3.0. Business Sector Aspect

                        1.3.1. Effects on Capital Requirements

                        1.3.2. Effects on Switching Costs

                        1.3.3. Effects on Retaliation of Outside-the-Zone Competitors

                        1.3.4. Effects on Bargaining Power of Suppliers and Customers

            1.4.0. General Environment Aspect

                        1.4.1. Effects on Demographics

                        1.4.2. Effects on Local Economy

                        1.4.3. Effects on Local Politics and Legislation

                        1.4.4. Effects on Socio-cultural Aspects

                        1.4.5. Effects on the Level of Local Technology

 

 

Organizational Breakdown Structure (OBS)

 

1.0.0. Project Manager

 

1.1.0.   Customer Survey Division

1.1.1.   One (1) Senior Transport Analyst

1.1.2.   One (1) Junior Transport Analyst

1.1.3.   Three (3) Junior Research Assistants

                                     

            1.2.0. Operations Survey Division           

1.2.1. One (1) Senior Business Economist

1.2.2. One (1) Junior Transport Analyst

1.2.3. One (1) Junior Business Economist

1.2.4. Three (3) Junior Research Assistants

                       

            1.3.0. Business Sector Evaluation Division

                        1.3.1. One (1) Senior Business Economist

1.3.2. One (1) Senior Transport Analyst

 

            1.4.0. General Environment Scanning Division

                        1.4.1. One (1) Senior Transport Analyst

1.4.2. One (1) Junior Business Analyst

           

            1.5.0. Administrative Staffs (e.g. secretary and clerk)

                       

1.6.0. Outsourced Personnel

           

                       

 

 

 

 

 

 

Activities

Duration

Resources

Customer Survey

 

 

Prepare questionnaires

20 days

Customer division, (1) secretary/ clerk

Conduct interviews and distribute questionnaires

180 days

Customer division, (3) secretary/ clerk

Record and organize data

10 days

Customer division, (1) secretary/ clerk

Apply statistical treatment to quantitative and qualitative data

10 days

Customer division

Search applicable theories

20 days

Customer division

Report findings

10 days

Customer division

Justify reliability and consistency with past researches

20 days

Customer division

Definition of implications

10 days

Customer division

Summarize, secure copy and file

5 days

Customer division, (1) secretary/ clerk

 

285 days

 

Business Operations Survey

 

 

Prepare questionnaires

20 days

Operations Division, (1) secretary/ clerk

Conduct interviews and distribute questionnaires

90 days

Operations Division, (3) secretary/ clerk

Record and organize data

10 days

Operations Division, (1) secretary/ clerk

Apply statistical treatment to quantitative and qualitative data

10 days

Operations Division

Search applicable theories

20 days

Operations Division

Report findings

10 days

Operations Division

Justify reliability and consistency with past researches

20 days

Operations Division

Definition of implications

10 days

Operations Division

Summarize, secure copy and file

5 days

195 days

Operations Division, (1) secretary/ clerk

 

 

 

Business Sector Evaluation

 

 

Evaluate past researches

20 days

Sector division, (1) secretary/ clerk

Study established theories and principles within the British environment

20 days

Sector division

Study established theories and principles within  a global perspective

20 days

Sector division

Conduct forums with experts and academicians

60 days

Sector division, other divisions, Outsourced personnel, (5) secretary/ clerk

Formulate over-all business impact evaluation mentioning the effects on key industries

30 days

Sector division, other divisions, (2) secretary/ clerk

Re-check findings on consistency and reliability

10 days

Sector division, division heads

Make reports and summaries

10 days

Sector division

 

170 days

 

General Environment Scanning

 

 

Define current PESTEL situation in the area

5 days

Environment division

Conduct research if PESTEL knowledge is insufficient

10 days

Environment division

Conduct short interviews with experts, politicians, lawyers and other pertinent people about the future of PESTEL

 

Collate data

30 days

 

 

 

 

5 days

Environment division, (2) secretary/ clerk, outsourced personnel

 

 

 

Environment division, (1) secretary/ clerk

Analyze data

10 days

Environment division

Search relevant theories and principles

10 days

Environment division

Report findings, summarize, secure copy and file

5 days

Environment division, (1) secretary/ clerk

 

75 days

 

 

 

Business Report

Notes to Customer Survey

There are seven (7) city-districts within the metropolitan county of West Midlands.  This part of West Midland region is suitable for survey because this part is populated and whose business activities are abound.  The seven districts and there population are Wolverhampton (239,258), Dudley (305,600), Walsall (253,500), Sandwell (286,300), Birmingham (1,000.200), Solihull (200,900) and Coventry (304,600).  Five hundred (500) houses will be surveyed from these districts except Birmingham which will have one thousand five hundred (1,500) houses due to its relatively bigger population.  The customer division including the head will go out for survey although the head (e.g. senior employee) will interview houses of more prominent people.  Further, each can interview at least five (5) houses per day which gives a total of twenty five (25) houses per day for the whole division.  As a result, it will take twenty (20) days for the division to finish each district survey while Birmingham will take sixty (60) days.

 

Preparations of questionnaires will require review of related questionnaire framework (5 days), scanning a particular district (5 days) and establishing the questionnaire itself (10 days).  In doing the succeeding activities, the division will be not go to the next task if the preceding tasks are not completed and verified.  Necessary software, books, journals and online library are considered overheads because the company has these sources already.  The conduct of interviews require field work which can result to transportation, hotel and allowance costs.  Communication cost can also transpire from the transaction of the headquarters and field employees.  Performance monitoring will be performed by the project manager which can include quantity and quality of work for the day with the assistance of the senior specialist.   

 

Notes to Business Operations Survey

On the other hand, business survey will include those businesses which likely to be within the charging area.  It is assumed that one hundred (100) businesses are within this area except for Birmingham which has three hundred (300) and the division can finish two (2) businesses in one day.  Their business size is those in medium to small capital because it can be argued that big companies have low sensitivity to charging effects.  The senior employee will not interview except for difficult situations where the business owner does not want to show business data.  As a result, the division can finish the six districts in sixty (60) days while Birmingham can be finished in thirty (30) days.  It can be assumed that the division can gather financial information relating to logistics and marketing that can be affects when customers tend to be less due to charging zone effects to business operations.  The duration and nature of activities is the same as the customer survey except for the conduct of interviews because there are relatively less sample required for this particular survey.  Nevertheless, the division will incur the same costs.

 

 

Notes to Business Sector Evaluation

The business sector evaluation team is only composed of two senior employees experienced in various aspects of business operations and transportation industry.  They are also considered as the experts in their fields and have higher degrees which make them in-depth to the relevant theories and principles that can be applied in the current research.  Their findings will be the backbone of analysis for all surveys and scanning that have done.  They will focus on the implications of surveys and scanning to the overall assessment on business industry with emphasis to key sectors of each district.  Their task is to regularly collaborate with the heads of other divisions that are currently doing their surveys and scanning to have an idea on what to research on secondary data.  After having established background, it is time for in-depth interviews including forum to experts and other academicians regarding the research.  This task is one of the crucial tasks of the team which will affect the overall credibility of the findings because respected and known people will evaluate the on-going and actual results of research.  The selection and notification will take 10 days while actual communication/ forum to a group of experts will take several weeks until the surveys and scanning are finished.  Business sector evaluation output will conclude the research project because it tackles business issues in the locality in a very general manner unlike business operations which is more in-depth.

 

Secondary researches will be conducted within and outside the headquarters.  This will involve some transportation and allowance costs.  Further, selection and preparation for a list of experts will connote representation costs which can include meetings in a restaurant and home visits with gifts to the expert among others.  As the senior analysts will communicate to known personalities, they should be equipped with proper attire to set the mood and professional environment which can require other costs.  Conducting actual forums can occur before or after the necessary surveys and scanning while the overall assessment can only occur after surveys and scanning findings/ implications are determined.  At that point, all divisions are required to meet and integrate their findings.  When this is finished, the project is also finished.        

 

Notes to General Environment Scanning

The general environment team is consisted of two people.  The allocation of authority to a senior transport analyst and subordination of a junior business analyst is a technique to focus the research on transport-related areas.  The general environment may be too ambiguous and ever-changing that business economists may aggravate the difficulty due to their holistic approach.  Their primary task is to interview people expert in the PESTEL environment concretize their knowledge through these interviews.  It will take few months to finish their task.  Compared to two surveys above, PESTEL will undertake less time due to focused interviews necessary to complete the information.  Perhaps, after PESTEL analysis is done, the team can help other teams to expedite the activities under their department.  This act will maximize the full-time positions of these employees with regards to the research project.

 

The entire task will be carried in the headquarters except for the interviews.  As a result, transportation expense will be incurred.  As both employees are living within the metropolitan county of West Midlands, they are familiar with current issues although forecasts would be inquired to the experts especially the politicians.  As a result, representation costs and other costs incurred like the business evaluation team will ensue.              

 

Appendix                 

(See Project Management attachment)

 

 

Human Rights Violation:The Case of Extra Judicial Killings of media personnel,Child Abuse:The Case of Early Child Labor in the Philippines ;Early Pregnancy: The effect of Sub-standard Educational Opportunity

Human Rights Violation: The Case of Extra Judicial Killings of Media Personnel

Abstract

The premise is that regardless of the age, an individual has rights, and that media personnel’s rights are human rights also. As such, many international human rights instruments recognise these media personnel’s rights and strongly condemn violation of such rights. One apparent violation of the human rights of the media personnel is extra judicial killing. Extra judicial killing refers to an illegal killing of anyone from these categories: political figures, trade union leaders and members, dissident, media and other social figures such as from the government. This study will explore the extent of extra judicial killings involving media personnel. The study will treat extra judicial killing as the most common form of human rights violation of media personnel.

Significance of the Study

This study is significant with the understanding of the prevalence of extra judicial killing intended for media personnel. The research could contribute to understanding the serious implications of such not just for the government that is tainted with extra judicial killings but also for the future of media broadcasting and the society as a whole. The results can also contribute to the scarce studies written for this topic. For the students, the research may serve as a reference for future researches. New issues will presented and, from there, provide other researchers a topic which they can explore themselves. 

Goal of the Study

The main aim of the study is to investigate extra judicial killing in Philippine context. The specific objectives include: 1) to determine the motivation behind the killing (political, economic, religious, etc.); 2) to distinguish in what specific ways extra judicial killing limp the media industry; 3) to study actions of the media agencies and authorities about the problem of extra judicial killings and 4) to recommend ways on how to minimise or completely abolish extra judicial killings.

 

Child Abuse: The Case of Early Child Labor in the Philippines

Abstract

Poverty is often invoked as a reason for child labor. Poverty reasons include paying for debt, low benefits from employment, payment for education and lack of recourse to public funds. There are families who are unable to support their children which make these children an easy prey for the trade beyond particularly when it comes to their education. These lead them to be uneducated with no skills and poor educational background and because of lack of alternatives in the end they end up as full-time laborers while some end up starting their own families at a very young age. As cyclical as it is, children from parents who are uneducated often becomes child laborers themselves. Child abuse has been considered the primary reason of the increasing number of child laborers. Abusive practices are often employed to forcefully involve a child to labor for the sake of the family’s needs. Although it is still rooted in poverty, one aspect that best justifies this situation is the power imbalance, that is, between parents or guardians and the child. The study will investigate child labor in the Philippines as an abusive practice.     

Significance of the Study

The study will be a significant endeavor in establishing the prevalence of child labor in Philippine context. The study will be helpful to policymakers in the area so that they can distinguish, analyse and evaluate the current performance of the government in addressing the problem of child labor and how it can be eradicated in the future. Moreover, this study will be an important contribution to a body of research concerning the child abuse and child labor.

Goal of the Study

The main aim of the study is to investigate child labor as an abusive practice that is rooting from poverty. Generally, the research will be conducted to understand the interplay between child abuse and child labor. In particular, the study purports to: 1) analyse familial patterns how child abuse eventually becomes child labor; 2) evaluate how child abuse and child labor undermines the quality of lives of the children academically and otherwise.  

 

Early Pregnancy: The Effect of Sub-standard Educational Opportunity 

Abstract

Teenage pregnancy is simply defined as a teenaged or underage girl becoming pregnant. The term connotes that the girl has not yet reached legal adulthood before conceiving. A teenage girl may become pregnant because of various reasons or situations but all teenage pregnancies are a result of sexual activities either voluntary or not. One of the most traumatic and devastating effects of teenage pregnancy is making it difficult for the girl to continue with her education. Drop-out rates, repeaters, poor scoring and unable to graduate are the academic consequences of teenage pregnancy. This paper proposes to explore how teenage pregnancy affects academic progression.

Significance of the Study

I am expecting a role in the social schema. It is my role to contribute to literatures concerning social processes such as early pregnancy. In addition, this study will be important for parents, teachers, school authorities and authorities because it will increase their understanding of the prevalence of teen pregnancy that is brought by sub-standard education. For educational policy makers, the importance of educational materials and contents of the curriculum could be addressed through this study. 

Goal of the Study

The main aim of the study is to explore how sub-standard education implicates early childbearing. It also purports to: 1) evaluate how teenage pregnancy affects the academic progression of the teenagers as well as 2) to determine the changes in academic performance, achievement and progressions of the teenagers when becoming pregnant and 3) determine the perceptions, attitudes and beliefs of  the pregnant teenagers about their education.

Corporate Finance : Case Study of Tomkins plc

Introduction

            Businesses are developing to suffice the need of the society. In any current business organization, progress that the company is making is recorded as basis for, among a host of other essential things, decision-making and as a benchmark for measuring the firm’s performance for the period under scrutiny (Daroca, FP & Nourayi, MM 1996). A financial situation analysis is one such measure that documents current and future financial situation in an attempt to determine a financial strategy to help achieve organizational goals.

In any contemporary operating organization, progress that the company is making is recorded as basis of assessing the stewardship of management and for making economic decisions. A financial statement analysis is one such yardstick that takes into consideration current and future financial situation in an attempt to determine a financial strategy to help achieve organizational goals. Various accounts from the published financial statements are evaluated in relation to each other to form performance indicators, which are then compared to ‘established’ standards. Financial statements are, according to Pike, R & Neale, B (1999; 15), the ‘universally accepted tools for analysis of a business entity’. If properly understood, they let the users know how good a company looks and how well it has been doing. They are, at best, an approximation of economic reality because of the selective reporting of economic events by the accounting system, compounded by alternative accounting methods and estimates (Barton, D., Newell, R & Wilson. G, 2002). The purpose of financial statements is to provide users (business owners, lenders, managers, suppliers, customers, attorneys and litigants and employees and job seekers) with a set of financial data that, in summary form, fairly represents the financial strength and performance of a business (Pike, R & Neale, B 1999; 15). They reveal opportunities and provide protection against financial pitfalls. Ideally, financial statements analysis provides information that is useful to present and potential investors and creditors and other users in making rational investment, credit and other similar decisions (Barton, D., Newell, R. & Wilson. G. 2002). Further, they are comparative measurements of risk and return to make investment or credit decisions as they provide one basis for projecting future earnings and cash flows.

 

About the Company[1]

            Tomkins plc is the mother of a large number of subsidiaries that are organized into two separate business groups: Industrial & Automotive and Building Products. Basically, both businesses have strong market positions and technical leadership and own some of the best-known brands in their respective fields.  The group is listed in both London and New York stock exchange with revenue in the 1st half of 2008 of 2.9m USD and over 33,000 people worldwide i.e. 21,635 employees with 73 production facilities for their Industrial and Automotive sector and 11,817 employees with 65 production facilities for their Building Products sector. As of the first half of 2008, the group revenue is quite impressive despite of the current global financial crisis compared to other global businesses.

 

SWOT Analysis

            The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. (Bradford, R.W., Bradford R.W,  Duncan, J. Peter, & Brian Tarcy ,1999). This section addresses hypothetical key strengths, weaknesses, threats and opportunities for TOMKINS PLC establishment in United Kingdom.

Table 1. SWOT

Strengths:

Weaknesses:

• Infrastructure in place

• Basis for strong management team

• Possibility to evolve into range of offerings

• Location is highly suitable

• Very focused management/staff

• Well-rounded and managed business

• Marketing plan in place

• Focus maybe too narrow

• Lack of awareness amongst prospective customers

• Potential need for larger premises

 

Threats:

Opportunities:

• Major player may enter targeted market segment

• Economic slowdown could reduce demand

• Market may become price sensitive

• Market segment's growth could attract major competition

• Market segment is poised for rapid growth

• New markets offer great potential

• Distribution channels seeking new services

• Potential to diversify into related market segments

           

            Basically, firms are competing to achieve above normal return, but being monopoly is not the only way to achieve it. Firms can differentiate themselves with others through innovation: competing to be different. Although the innovation itself maybe profitable, the innovating firm itself may not profit from it. Therefore it is important to establish complementary assets alongside firm’s innovative capability to capitalise majority of the gain (Teece, 1986). Scholars refer the development of complementary assets as the sixth force (Grant, 2001), in addition to Porter’s seminal five forces model (Porter, 1980). Another major problem for companies not profiting from their innovation is that they spend too much time on seeking and creating innovation but “inability of corporation to turn knowledge into practical applications and profit” (Leonard-Barton et al., 1996). Firms need to look deeper into their knowledge base, and often to exploit hidden knowledge inside the firm is more profitable than to explore new knowledge. This is partly because of the cost saving. However, when hidden knowledge inside the firms are well exploited, it is important for the firm to innovate through reconfiguration of existing knowledge and/or seeking new knowledge externally (Kluge et al., 2001).

            When the knowledge of an innovation is spill over across firms, companies expect appropriability to fall during the life cycle of a technology as the cumulated search efforts and the fraction of agents knowing the code increase. However, this long-term trend may be counteracted by a number of strategies designed to limit or to compensate the fall in appropriability. The most promising way of achieving competitive advantage through innovation is to continuously innovate, and innovate in a way that competitors are unable to catch up through their incremental innovation and unmotivated for radical innovation. An interesting case would be TOMKINS PLC, a company constantly improves the services/products that suits to the taste of different nations.    

 

Financial Analysis

Typically, financial measures as well as the relationships utilized in performance measurement are designed to stress outcomes with minimal or no consideration of the decision processes of the manager. The traditional or conventional measures of performance are based on periodic profitability indicators without the consideration to particular variables that drive these measures (Daroca and Nourayi, 2002). Performance in the past is mainly based on conventional accounting and measures based on market performance. Specifically, these measures include the evaluation on net income, return on equity/capital employed, earnings per share as well as share-price return. Some financial outrages have put corporate governance in the business spotlight. Basically, the issues and interest in the subject corporate finance can be traced back at least to the eighteenth century and economists such as Adam Smith. Certainly, there is probably little new in the existing debate involving to financial negligence, except for the range of the financial and economic consequences which replicate the greater importance of finance in the current economy. The purpose of this part of the paper is to examine the financial context of corporate governance of TOMKINS PLC. It attempts to evaluate the performance of the company in terms of financial reports. Basically, corporate governance has significant implications for the performance of the financial sector and, by addition, the economy as whole. Well-organized resource allocation is supported by strapping shareholder control rights, which assists investment in fresh development actions and confines the scope for corporate over-investment. Apparently, investment decisions are further linked to corporate governance insofar as investors prefer to invest in appropriately supervised corporations and be apt to avoid investing in ambiguous environments. In this way, the investor assurance created by sound corporate governance provisions and the security of minority shareholders encourages the financial market progress by encouraging share ownership and capable capital allocation across firms. Transparent financial reporting is necessary to sending efficient corporate governance.

For the last ten years, the engineering and machinery industries in United Kingdom have seen the rapid growth of the number of firms offering financial situation analysis services.  This serves as a proof that more and more organizations are realizing the importance the analysis of their financial situation in order to keep up with the demands of the business world. 

 

Analysis of Information

• Dividends and Share Price

Table 1.  Dividend Information

 

1997

1998

1999

2000

2001

Apr-02

Dec-02

2003

2004

2005

2006

2007

Interim (GBp per Share)

3.06

3.5

4

4.6

4.6

4.6

8

4.6

4.83

5.07

5.32

5.32

Final (GBp per Share)

8.39

9.67

11.15

12.85

7.4

7.4

0

7.4

7.77

8.16

8.57

8.57

Source: http://www.tomkins.co.uk/tomk/ir/shservices/divinfo

            In accordance to the previous years of performance, Tomkins plc dividend for their shareholders reaches its peak in year 2000 and slows down as the new millennium enters.  However, as seen in the cycle, the dividend shows positive future even though there are crisis in the global business.  Even tough the 2007 is a failure as compare to their previous years of operation, the downfall of 7.4 in 2001 was still promising since the dividend as of 2007 becomes 8.57. 

 

 

 

Figure 1. 2009 Share Price

Last Trade: 16:35  02/03/2009

With regards to share price, the group was currently experiencing some impact of the global financial crisis in which their current price fell to 1.5 in London Stock Exchange and 0.24 in New York Stock Exchange.  This surge down is hopefully not too terrible for the performance of the group.  However, the group should create and innovate extensive ways to maintain their profitability and progress.

 

• Income Statements

            From the given summary of income statement (see figure 2), as of 2007 Tomkins Plc's net profit margin fell 0.83%. This along with an increase in selling, general and administrative costs has contributed to a reduction in net income. The return on Assets fell to 1.12%, return on equity fell to 3.42% and return on investment fell to 1.45%.  Basically, we can deviate from these values that TOMKINS PLC is not expressively performing not only in UK alone but also to other parts of the world.  As we can see in figure 2 both the revenue and net income of the company suffers from a decline particularly in 2007 net income.

 

Figure 2.  Summary of Revenue and Net Income of TOMKINS PLC

Source: www.ft.com

            From the given situation and results of revenue and net income of TOMKINS PLC Ltd., it seems that the company is not expressively performing in their industry. Thus, the organization still needs to evaluate not only their business strategies but also the political, economic, and cultural factors of their host country i.e. United kingdom. It is not whether the business is in a market oriented status or not, but the important thing is the value of their products as perceived by the consumers. The business norms in United Kingdom and global community have been changing and are becoming more compatible with international codes and norms after a series of economic reforms (Barton, D., Newell, R. & Wilson. G. 2002). Given the nature of the UK economy and the large potential of the market, doing business with UK requires a continuous process of learning, caution for instability, and flexibility to catch opportunities.

 

·                                         Balance Sheet and Cash Flow

            From the information gathered and as seen in Figure 3, the 2007 cash reserves at TOMKINS by 37.34m. However, the company earned 393.54m from its operations for a Cash Flow Margin of 9.34%. In addition the company generated 8.69m cash from investing, though they paid out 435.73m more in financing than they received. From this discussion, it shows that TOMKINS PLC performed very well in 2005 compared to their performance in 2007 or even in 2009.As seen in the figures, cash flow often describes as the amount of cash being received and spent by a business during a defined period of time, sometimes tied to a specific project. Cash flow can be used to determine the performance of a certain company.  With this regards we can see that TOMKINS PLC cash flow is declining after the expressive performance in 2005.  Moreover, the increase of cash reserves of TOMKINS PLC generated in 2005 was used in 2006 development and expansion projects. According to the website TOMKINS PLC, their decline in terms of their sales performance is because of their current marketing strategies.  With this regard, the company needs to evaluate the effectiveness of their current marketing strategy.  There should have a careful evaluation in order gain business success.

 

Figure 3.  Summary of Cash Flow of TOMKINS PLC

Source: www.ft.com

 

In financial analysis, the balance sheets of company reports conform to the financial ratios. The purpose of ratios is to find out how profitable the company is, we can calculate if company has enough liquid resources to pay its creditors, employees and finance charges. It is a useful to shareholders to find out their value of shares. Ratios are most powerful and simplest tool to evaluate company’s performance and its validity (Riahi-Belkaoui, A 1998).

Atril & Mclaney (2004) mentioned that by calculating a relatively small number of ratios, it is often possible to build up a reasonably good picture of the position and performance of a business. Ratios help to highlight the financial strengths and weaknesses of a business, but they can not, by themselves, explain why certain strengths or weaknesses exist, or why certain changes occurred. Just by details investigation will find the reasons. Ratios can be grouped into certain categories; each of them identifies a particular aspect of financial performance or, position.  In this paper, we’ll be considering the liquidity ratios and debt ratio of TOMKINS PLC. Liquidity ratios show how quickly the company can meet its short-term obligations using its current assets (Riahi-Belkaoui, A 1998).

 

 

 

 

 

 

 

Figure 3.  Summary of Liquidity Ratios of TOMKINS PLC

Source: www.ft.com

 

It is evident in the computations that TOMKINS PLC was performing expressively in 2005 and slows down as the years went up. However, the entry of 2009 shows good future for the group. This means that TOMKINS PLC is always bale to meet their current liabilities using their current assets (cash, inventory, receivables). As shown in the figure, the company should now start to use their assets to grow the business.  However, the company should be still be observant to their financial ratios i.e. not too low so as to drive creditors away with respect to the level of risk present. Since quick ratios are perceived as a sign of the company’s financial strength or weakness, the figures in the previous table shows the relative stability of the financial strength of TOMKINS PLC. A higher number would indicate stronger financial performance, and a lower one means weaker performance.

            Apparently, the high financial leverage ratios of a company provide an implication that the organization is solvent in the long-term.  With this regard, the debt ratio shows the TOMKINS PLC’s position to meet it long-term obligation or liabilities. Debt ratios are dependent of the company’s classification of long-term leases and other items as long-term debt (Pike, R & Neale, B 1999). Pike, R & Neale, B 1999, stated that this is the gauge with which the financial strength of a company is a sign of the ratio of capital that has been funded by liability, counting preference shares.

A higher debt ratio (which means the company has low equity ratio) does not give the firm’s creditors the security they require from an organization (Pike, R & Neale, B 1999). The firm would, as a result, find difficulty in raising supplementary financial support coming from outside sources if the firm wishes to take such action. Therefore it reveals that the higher the debt ratio, the harder it is for the company to raise funds from the outside.

 

Recommendations

            Today, most companies like TOMKINS PLC find it impossible to create any kind of sustainable competitive advantage based on product alone. It is common knowledge that every one of the successful companies sought and found a precise understanding of how it could create a customer-centered competitive advantage. Thus, there are numerous aspects that every management should tackle. In TOMKINS PLC, the key internal strengths are the appropriate and effective marketing strategies used. On the other hand, the flaws of the marketing strategies implemented by the company serve as its major internal setback. Then again, the continuous effort of every company likes TOMKINS PLC to improve its operational standards is the ultimate solution to emerging conditions brought about by different occurrences such as stiff competition, globalization, technological innovations and others.

            Based on the business strategies used by the company and the analyses presented, TOMKINS PLC is indeed a company that has achieved success in the engineering and  machine industry. Nonetheless, the company still has to perform other strategic moves so as to maintain its successful status. With the identified weakness and threats of the company, the following strategic moves are recommended:

Focus on strengthening foreign market access through consumer studies, partnerships with retailers and product development.

Enhancement of promotion or marketing activities.

            There are reasons behind these recommendations. One of which is the growing competition in their industry. Considering the activeness of TOMKINS PLC’s rivals in enhancing their businesses, the strategies of the companies should focus on two major essentials: profit increase and market growth. These two factors are important not only in keeping TOMKINS PLC afloat in the industry but also in supporting other internal or external projects of the company. Another reason for these strategic moves is the capability of TOMKINS PLC to put them into action. Aside from the finances, the company needed to increase their access to other foreign markets not only United Kingdom for market growth and technologies for increased profit. In other words, these two predicted strategic moves are not only beneficial for the company’s current status but feasible as well.

Since it is recommended for the company to expand their distribution to other foreign countries, then it is also likely for the company to have partners with other local retailers in order to distribute its products to other foreign locations while it continues on applying its direct business model to other areas. One of the important strategies that TOMKINS PLC may consider is to operate alongside a local business partner. This will help the firm adapt easily to the new and foreign business environment (Overby, 2000). A local partner can also assist in learning the culture, practices, regulations and means of interaction in the area. This will support the company’s consumer study efforts. More importantly, a foreign business partner can also help in achieving progress faster. Training the staff becomes even more important in foreign business ventures. The workforce must be supported fully particularly in adapting the business’ new concepts, standards and technologies (Humberg, 2003). The management should ensure that the local staff is also well-adjusted to the new system so as to encourage them to contribute more for the business.

 

Conclusion

In order for a certain business to sustain their development, they should regularly assess the value of their portfolio. Stakeholders should be given importance by the company. Stakeholders, sometimes also called sponsors, or management, are extremely important to the business. Financial information is important to them because they are the ones that give political as well as resource support for the project. However, normal stakeholders are people that are influenced by any business decisions - they include stockholders but are hot limited to just that. They also include employees, surrounding businesses, competing businesses, neighborhoods of the business, customers, etc. When that business makes important decisions, including bad ones - everyone is affected by it. Thus, from this we may say that stakeholder typically refers to anyone who has a direct financial stake in a company, therefore financial report are important for them. This does include shareholders if the company issues stock, any other owner/partner and employees. Although it is argued that the vendors servicing a business and even the competing business have a financial stake in the company, these entities are beyond the scope of the definition.

 

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[1] All information are from http://corporate.Tomkins Plc.com/